Infosys puts a break on fresher hiring, relying more on experienced hands

Share of young engineers in 18-25 age group drops to 28% in FY18, senior staff ratio goes up

India’s second-largest information technology company, Infosys, is relying more on experienced hands than fresh graduates even though it weighs to its costs, according to the company’s latest annual report. This is happening when the sector is witnessing slower growth with increasing pressure on profit margins.

According to the latest annual report for 2017-18, the percentage of the Bengaluru-headquartered company’s employees in the age group of 18-25, came down to 28.16 per cent, from 31.19 per cent in the previous financial year. In absolute terms, the number of employees in this group was 57,475, against 62,489 in FY17. Employees in this group largely constitute of newly-hired engineers from colleges.

The percentage of employees above this age group had gone up during this period. For example, employees in the age group of 26-30 constituted 32.25 per cent of the total staff strength in FY18, against 32.09 per cent in the previous year. Similarly, mid-level employees in the age group of 31-40, constituted 32.5 per cent, which rose 168 basis points over the previous financial year. The ratio of employees in the 41-50 age group also saw a rise of 100 basis points over the previous financial year to 5.92 per cent. However, despite the higher ratio of experienced staff in workforce, Infosys incurred only 3.6 per cent rise in expenses towards salaries and bonus in FY18 to Rs 346.7 billion.

The change in Infosys’s employee mix also reflects the growing trend of slower fresher hiring by Indian IT firms, expected to gain pace in the current financial year as well. Owing to uncertain demand environment and changes in client demands, Indian IT companies are hiring fewer number of freshers while majority of them are resorting to just-in-time hiring in case of lateral (experienced ones).

“The intake of fresh engineers by Indian IT firms is certainly going to drop further as companies are seen steadily improving their (employee) utilisation rates. While they are no more hiring in bulk through campus recruitment programmes, the normal attrition in higher age groups is also less owing to lesser avenues outside which means the ratio of senior staff that the sector employs will go up,” said Kris Lakshmikanth, chief executive officer & managing director of Head Hunters India.

Infosys said the percentage of senior management level employees in the age group of 51-60 was 1.03 per cent, against 0.90 per cent in FY17.

Employees above 60 years of age constituted 0.19 per cent of the overall strength, which was at 0.14 per cent in the previous financial year.

56,000 IT jobs in danger? Infosys, TCS say they're not responsible for mess

According to reports, the 7 biggest IT firms operating in India are set to let go of 56,000 workers

In his social media post, an anonymous techie called the recent spate of layoffs in the information technology (IT) sector a "nightmare". The bad news is, the nightmare is unlikely to end anytime soon.

The seven biggest IT companies operating in India, including Wipro, Infosys, Tech Mahindra and Cognizant, are planning to layoff at least 56,000 engineers this year, Livemint reported on Thursday.

According to the report, this projected number is double the amount of layoffs by these companies last year. Mint claims the astoundingly high number was arrived at after "extensive interviews with 22 current and former employees across these seven companies".

The companies concerned are Infosys, Wipro, Tech Mahindra, HCL Technologies, US-based Cognizant Technology Solutions, DXC Technology, and France-based Cap Gemini SA. According to the report, they have denied that the mass layoffs signal a crisis and have attributed the increased layoffs to more rigorous appraisal processes.

Also Read : All ATM withdrawals not chargeable, SBI clarifies after furore in Kerala

Of course, the news of IT majors handing out pink slips has already been flowing in. On Wednesday, Tech Mahindra let go of around 1,000 of its employees. Tech Mahindra's layoffs, however, were not an outlier; Wipro fired around 500 of its employees in April, and Cognizant has signalled it could let go of close to 10,000 of its employees. (Read more)

However, Infosys has said that it does not plan to cut jobs.

Aside from the Mint report, earlier reports had also suggested Infosys was planning to hand out pink slips to hundreds of its employees at its bi-annual performance review.

According to an Economic Times report, Infosys Chief Operating Officer U B Pravin Rao has said, "I would like to put to rest any speculation around planned layoffs. As has been the case in the past, we will primarily see some performance-based exits." (more)

Wipro Q4 consolidated net rises marginally to Rs 2,267 cr

Board approves bonus issue in the ratio of 1:1; standalone net rises 20% on sequential basis

Wipro, India's third largest software exporter said fourth quarter profits grew 0.4% to Rs 2,267 crore on revenues of Rs 13,987.5 crore, a jump of 2.6%

The Bengaluru-based IT services firm said IT services revenue grew 2.7% over the previous quarter to $1.96 billion. For the fourth quarter, Wipro had projected growth between $1.9 billion-$1.94 billion or 1-2%.

Wipro has forecast its IT services revenue in the first quarter of the fiscal 2018 to be in the range of $1.92 billion to $1.96 billion.

Read more : TCS, Infosys got only 8.8% of total H-1B visas: Nasscom's rebuttal to US

“We delivered revenues within the guidance range in our fourth quarter,” said Abidali Z Neemuchwala, Chief Executive Officer of Wipro. “We are confident that the recovery in Energy & Utilities and our demonstrated strength in Digital will help us improve our growth trajectory during the course of the current financial year.”

Wipro's larger rivals Infosys and TCS too faced business and currency challenges in the quarter.

The company board approved bonus issue in the ratio of 1:1.

Standalone net profit jumped 20% to Rs 2,303 crore sequentially as compared to Rs 1,918 crore in December quarter. (more)

TCS announces share buyback; Infosys and Wipro may follow

Investors eye a piece of the large cash kitty as growth slows

Barely a week after the US-based software services player Cognizant Technology Solutions, which has several delivery centres in India, announced plans to return $3.4 billion to its shareholders through buyback of shares and dividends, Tata Consultancy Services (TCS), too, said its board would be meeting on Monday to consider a buyback plan.

In a statement to stock exchanges on Thursday, TCS said, “We would like to inform you that the board of directors will consider a proposal for buyback of equity shares of the company at its meeting to be held on February 20, 2017.” If approved, this will be TCS’ first buyback since its listing in 2004.

The Street took the news positively, as stocks of domestic information technology (IT) majors - TCS, Infosys, Wipro, Tech Mahindra and HCL Technologies - were up 1.4-3 per cent on Thursday.

When asked about the company’s capital allocation plans, Rishad Premji, whole-time director and chief strategy officer, Wipro, said, “We did a buyback last year worth Rs 2,500 crore. We have a stated dividend payout ratio policy, which is 40-45 per cent, which we have maintained. We have said that on an annual basis, we actively discuss this within the company and evaluate what makes sense with the cash that the company generates. We are open to evaluating options like buyback, special dividends. It makes sense for the organisation, as we move forward.”

Buybacks are seen as the preferred route over dividends, as they are more tax-efficient. Besides dividend distribution tax at an effective rate of over 20 per cent, dividend income in the hands of all residents, except domestic companies, trusts or funds, also attracts an additional dividend tax of 10 per cent on dividend income over Rs 10 lakh a year. Read more

IT hiring at 10-year low, Infosys takes campus hires as interns

They'll be paid a stipend and assessed before taken on payrolls as it faces worst growth in a decade

Breaking News : India’s second largest software exporter Infosys Ltd is offering paid internship to campus hires before taking them on rolls, a move that that would impact new jobs across the IT sector when hiring by technology services companies is already at a ten-year low.

The Indian technology services sector is facing its worst growth period in close to a decade as they see clients reducing budgets on traditional outsourcing work, which is not being offset by growth in newer areas such as digital and cloud. In addition, routine maintenance work of customer applications or IT infrastructure, where freshers are normally deployed have been taken over by automation or robots.

With use of automation, these companies are shifting their employees from projects, where their jobs have become redundant and training them on skills to match new requirements. Infosys and its cross town rival Wipro shifted more than 8000 employees from projects to other roles due to automation during the first half of this fiscal.

“It was a surprise for us that they came with the internship roles before taking our students as trainees,” says a placement head of a college, who did not want to be named. “The job market this year has been bad. We agreed to it as we have no option.”

Infosys, among the pioneers to reach out to campuses through its Campus Connect programme says it provides a limited number of internships to students as they serve as an attractive proposition for potential employees. Read more about hiring by Top 5 IT Firms.

Missing Infosys employee died in Brussels attack

An Infosys employee from Bengaluru, missing since the deadly bombings in Brussels, was among those killed in the terror attack last week.

“The Belgian authorities have identified Raghavendran Ganeshan as one of the victims of the Brussels Terror Attack of March 22,” External Affairs Ministry Spokesperson Vikas Swarup said. Ganeshan was a victim of the blast that took place in the Metro at Maelbeek station in Brussels.

“The body is on its way to India via Amsterdam. Sincere condolences to the family,” Indian Ambassador to Belgium Manjeev Singh Puri was quoted as saying on Monday.

Infosys condoled the death of Ganeshan and said it will provide all possible support to the family. “…Our thoughts and prayers are with Raghavendran’s family and with those who were injured or lost a loved one in these attacks… We will continue to provide all possible support to his family in this hour of grief,” a company spokesperson said.

Raghvedran, 31, is survived by his wife and a one-month-old baby. He was working at Brussels for last four years on a project with telecom major Proximus. The family, originally from Tamil Nadu, moved to Mumbai several years ago. After he completed his junior college from Mumbai, Raghvendran went to Chennai to study engineering from where he was picked by Infosys during campus placements. He was passing through the Maelbeek station in the Metro like every day to reach his office when the terror attack took place.

This is not the first time an Indian IT firm has lost its employee in a terror attack. In September 2001, six engineers of Wipro, who were working at the World Trade Centre in New York, died when the Twin Towers collapsed after the worst-ever terror attack on American soil.

In December 2014, an Infosys employee was taken hostage among many others by armed terrorists in Sydney. However, he and the other Indian hostage managed to escape unhurt during the rescue operation.

“It is extremely sad when you lose somebody so dear. Employees of our organisations are literally a part of our extended family,” said B V R Mohan Reddy, chairman of Nasscom. “We as an industry have taken a number of precautionary measures but there are instances (like terror attacks) which we can’t avoid,” he added.

Going after Vijay Mallya? What about Rs 30,000 cr taxpayers lost in Air India

"What is the difference between Vijay Mallya who lost Rs 10,000 crore and Air India which lost Rs 30,000 crore? Bank money is lost (in case of KFA) and public taxpayer's money is lost (in AI's case)," asks Mohandas Pai, former Chief Financial Officer and HR Head of Infosys.

The only difference - Air India has a forgiving promoter - government of India who stood by the company despite the atrocious decisions taken by its management and those responsible for its growth and wellbeing. Read More.